(Yicai Global) Nov. 13 -- China’s iKang Guobin Healthcare has furiously denied a report that it is to merge with fellow health examination services provider Meinian Onehealth Healthcare Holdings and has reported the securities firm behind the report to the authorities, iKang Guobin said yesterday.

The statement put out by Guosen Securities is misleading and without factual basis, iKang Guobin said. iKang Guobin and Meinian Onehealth have no intention of merging or reorganizing with each other, it added. This statement will adversely affect iKang Guobin’s operations and its legal team was already in touch with the brokerage on Nov. 8. It has now taken the matter one step further and reported the analysts to the China Securities Regulatory Commission.

The furore can be traced back to a telephone meeting held by Shanghai-based Meinian Onehealth on Nov. 6 to explain a 30 percent drop in its share price since the beginning of the year, which has wiped CNY21 billion (USD3.2 billion) from its market value.

The paring of stakes was led by its second-largest shareholder Alibaba Group Holding, which has shed a quarter of its holdings to 8 percent so far this year.

The e-commerce giant is also a backer of iKang Guobin, in which the Hangzhou-based firm held almost 25 percent equity as of last January.

“We suspect that the reason behind [the crash in Meinian Onehealth’s stock price] is that Alibaba wants to avoid becoming the majority stakeholder,” analysts Xie Changyan and Zhu Hanqing said afterwards on the WeChat account of ‘Guoshen Healthcare,’ operated by Shenzhen-based Guosen Securities.

“Alibaba has been forced to start to resolve the issue of competition in the same industry and to begin the process of merging [Meinian Onehealth] with Ikang Guobin,” they said.

“Now is not a good time to invest in iKang Guobin,” they added, no doubt further infuriating the firm. “iKang Guobin is also likely to be affected by the Covid-19 pandemic.”

The analysts at Guosen Securities never contacted iKang Guobin for verification when writing the report, the Beijing-based firm said.

A former employee of Guosen Securities was recently hired by Meinian Onehealth, which might affect the objectivity of the report, iKang Guobin added. Jiang Weina was chief analyst of the pharmaceutical industry at Guosen, before joining Meinian Onehealth as vice president and secretary of the board on June 15, it said.

Editor: Kim Taylor